Consortium including Parsons leads bidders for California HSR first phase

Written by
William C. Vantuono, Editor-in-Chief

A California-based joint venture of Parsons, Tutor Perini, and Zachry has been named “apparent best value bidder” by the California High-Speed Rail Authority to design and build the first segment of California’s 500-mile, $68 billion, 200-mph high speed rail system.

The joint venture submitted a bid of $ 985.14 million for the 30-mile Madera-Fresno line, the northern stretch of the 130-mile Stage 1 Initial Operating Section (IOS) between Bakersfield and Madera, which is due to be completed in 2017. The bid was significantly less than the CHSRA’s anticipated price tag of $1.2-1.6 billion.

Each bidder was scored up to 70 points for their price proposal and 30 points for technical proposals, with the Parsons/Tutor Perini/Zachry team scoring full marks on price and 20.55 on the technical element, for a total of 90.55.

A joint venture of Dragados, Pulice, and Samsung came a close second, scoring 63.55 on price ($1.09 billion) and 26.13 on its technical submission, a total of 89.68. California Backbone Builders, consisting of Ferrovial and Acciona, bid almost $1.4 billion and ranked third. Ferrovial, Acciona, and Dragados are Spanish firms. Samsung is Korean. California High-Speed Rail Partners, consisting of Fluor and Sweden-based Skanska, was fourth with a bid of about $1.3 billion. California High Speed Ventures, with Kiewit Infrastructure West and Granite Construction, both U.S. companies, was fifth in the rankings, with a bid of almost $1.54 billion.

The five teams submitted their proposals in January.

CHSRA says it intends to proceed with a procurement with the highest-scoring bidder, although if it is unable to conclude a deal it may open negotiations with the second place group. The contract is expected to be signed within the next few weeks.

Construction is expected to start later this year on the Madera-Fresno line. The second, 170-mile phase of the IOS will extend the line south through the Tehachapi Mountains to Palmdale, and is expected to open in 2021.

According to the Los Angeles Times, there are some serious obstacles to overcome: “Building the first section will require a massive engineering feat that includes cutting a 1.7-mile trench through Fresno, erecting a 1.2-mile viaduct and three major bridges, and creating a tunnel beneath California Highway 180 in the Fresno area. The schedule is tight and delays would trigger penalties of $60,000 per day until reaching 10% of the contract, or as much as $150 million, which could wipe out much of the potential profit. Critics of the project have argued that the first bids will understate the full construction cost of the Fresno segment and are likely to contain provisions that could inflate the final bill. Whether construction will begin as scheduled is also uncertain. The CHSRA still does not own a single parcel of land for right-of-way along the Fresno-to-Madera route and a lawsuit is pending that could halt or delay the project if there is an unfavorable ruling.”

The LA Times also noted that “Tutor Perini, based in Sylmar (Calif.), has worked closely in the past with unions. Labor has strongly supported the project and spent $1 million on the political campaign to win voter approval of the system in 2008.”